Kantar reports U.S. ad spending up 3% last year

Fueled by political and Olympic advertising, total ad spending in the U.S. reached $140.0 billion last year, up 3% over 2011, according to a report released last week by Kantar Media.
Kantar tracks ad spending in measured media, including TV, radio, magazines, newspapers, online and outdoor advertising.
During the fourth quarter, total ad spending was up 2% compared with the same period in 2011.
“The advertising market has grown for three consecutive years, and in 2012 it added more than $4 billion in spend—with the Summer Olympics and political advertising contributing about one-half of the gain,” said Jon Swallen, chief research officer at Kantar Media North America.
The fastest-growing media category—and also the largest in terms of ad spending—was TV, which grew 8% over 2011, according to Kantar.
“Television media continued to lead the ad market,” Swallen said. “Both politics and the Olympics contributed significantly to TV ad spending. Beyond that, television sports programming, particularly on broadcast networks, continued to grow at a healthy pace.”
Within the television category, ad spending on Spanish-language TV channels grew 15%, while spending on spot TV grew 10%. Also up were network TV (9%), national syndication TV (8%) and cable TV networks (3%).
Outdoor advertising grew 5% and radio increased 3%.
Categories that were down last year included: newspapers (-3%), online (-3%) and magazines (-2%).
“The newspaper decline reflects the continuing losses in circulation,” Swallen said. “It also reflects a continuing reduction in ad space purchases by advertisers, which has been a trend over the last five years. Newspapers have fewer readers they can sell to advertisers, which is contributing to advertisers deciding to purchase less space, so [newspapers] get hit on both sides.”
He noted that circulation declines have not been as severe for magazines. Within the magazine category, ad spending was up 13% in Spanish-language magazines and 2% in local magazines, but down in consumer (-3%), Sunday (-3%) and b-to-b magazines (-2%).
Regarding the decline in online advertising, Swallen said, “We track display advertising only—not video or search. Display is a very mature digital ad form, one where increased volume is coming through ad exchanges, ad networks and bulk-buying at the lowest possible CPM. What is also happening is that the online audience is moving from PC desktops to mobile devices.”
Kantar does not track ad spending on mobile devices.
Swallen said one of the factors driving increased ad spending last year was more significant investment by midsize advertisers—those ranked between No. 101 and No. 1,000 on Kantar's list of top advertisers. Among these advertisers, ad spending was up 5% to 7% last year over 2011.
“Many of these advertisers are in competitive categories,” Swallen said. “They are not market leaders in their category; they may be the fourth, fifth or sixth brand in their competitive category. Many advertisers in those buckets are increasing ad spending in order to keep up with better-funded, bigger rivals.”
Spending for the 10 largest advertisers last year reached $15.4 billion, down 2% from 2011. The No. 1 advertiser—Procter & Gamble Co.—spent $2.8 billion in measured media, down 5% from 2011. No. 2 Comcast Corp. spent $1.7 billion, up 10%.
Rounding out the top 10 advertisers last year were: General Motors Co. (down 7%), AT&T Inc. (down 14%), L'Oreal (up 9%), Verizon Communications (down 13%), News Corp. (up 6%), Toyota Motor Corp. (up 13%), Berkshire Hathaway (up 12%) and Chrysler Group (down 14%).